The
company will run pilot programs in key markets this year, marking the first
time it is engaging in direct marketing of its own, he noted.

The
Russian miner is one of seven member companies of the Diamond Producers
Association, which is mandated to produce generic marketing on behalf of the
industry, but until now has shied away from running its own advertising campaigns.

However, Zharkov
recognized the need for the industry to increase its efforts to raise consumer
demand.

“High-value,
competing alternatives have fared better than diamond jewelry over the last
decade,” he said during International Diamond Week in Israel. “We all need to
increase our marketing effort. Over the next few years, it’s one of the
strategic goals of the industry to increase demand at the consumer level.”

Zharkov noted
that millennial consumers were looking for assurances regarding the
authenticity of their purchases, and that traceability programs were consequently
gaining momentum. Tracing and promotion of natural diamonds are also necessary
to protect the supply chain from undisclosed synthetic diamonds illegally
making their way in, he added.

ALROSA is therefore
participating in the Gemological Institute of America (GIA)’s “mine to market”
program, Zharkov reported. The program combines the highest level of
authentication and information about the entire life cycle and processing of a
diamond, starting from mining the gem and ending in jewelry manufacturing, he
explained.

The new marketing
and branding programs represent a slight departure for the mining company,
which has previously driven growth by focusing on raising diamond production. He
reiterated ALROSA’s plan to increase production 5 percent to 39 million carats
in 2017, adding that the company expects to sell all the diamonds it recovers
this year at relatively stable average prices.

Zharkov
stressed that the miner was working to strengthen its brand both at the
consumer level and within the trade. As part of its engagement in the trading
centers, it recently renamed its regional sales offices to bear its name. Whereas
the Israel office, for example, was previously known as Arcos Diamonds Israel,
it is now ALROSA Israel, he said.

“It’s very
important for us to support the different diamond centers,” he stated. “We
recently renamed our office so that there’s no mistake who you are dealing
with. It’s part of our brand development.”